This report from the AIHW examined the short-term impact of pre-existing diabetes (type 1 or type 2) and gestational diabetes on mothers in pregnancy and their babies between 2014 and 2015. Diabetes adversely affected mothers and their babies during pregnancy, labour and delivery. Diabetes affected nearly 1 in 10 pregnancies with 40,500 (8.9%) mothers having gestational diabetes and 4,700 (1.0%) mothers with pre-existing diabetes. The type and severity of complications experienced by mothers and their babies differs by maternal diabetes type, with mothers with pre-existing diabetes and their babies at highest risk of adverse effects. Having diabetes in pregnancy increased the risk of complications among some population groups including Indigenous mothers and their babies and those living in remote or very remote areas.